According to a relevant press release, the Bank has showed:
- Strong Core PPI performance in 9M 2020 at Euro 656.9 million, up by 3.6% y-o-y, driven by resilient core revenues and improved operational efficiencies.
- Solid Pre-Provision Income generation of Euro 892.5 million in 9M 2020, up by 1.5% y-o-yor 3% over Net Loans on an annualised basis, allowedfor the absorption of frontloaded impairments in 9M 2020.
- Impairment losses on loans in 9M 2020 ofEuro 736.6 million vs. Euro 750 million last year, or 2.5% over net loans, materially affectedby additional impairments of circa 287 million recognised by the Bank to account for the anticipated Covid-19 impact.
- Despite Covid-19 headwinds, Profit After Tax stood at Euro 130.4
million in 9M 2020 vs. Euro 91.6 million over the same period in 2019
Capital, Risk and Liquidity Position
Robust capital base, with Total CAD ratio at 18.3%, stable q-o-q, with capital buffer standing at Euro 3.42billion vs. minimum OCR threshold. At the end of September 2020, the Group’s Tangible Equity Book Value amountedto Euro 7.8 billionwith the Leverage ratiostanding at 12.4% vs. 11.6% in the previous quarter.
Group deposits up by Euro 1.3 billion in the 9M2020 period; Loan toDeposit Ratio at the end of September 2020 declined to 96% from 100% the previous year, while the Group's Liquidity Coverage Ratio (LCR) stood at 118.3% .
TLTRO III participation at Euro 11.9 billion, expected to provide a substantial improvement tofunding cost.Our NPE stock in Greece stood at Euro 18.3 billion, stable qoq due to the temporary halt in liquidations, lower curings andrepayments. Group NPEs contracted by Euro 1.3 billion y-o-y.
Galaxy project is in the final stretch
Galaxy has entered the final stages of the transaction process; following an assessment of the binding offers received, Davidson Kempner European Partners LLP was declared as the preferred bidder. Finalization of the agreement is targeted by year-end, with the transaction completion, anticipated within Q1 2021.
Post the acquisition of 100% of Cepal, the first independent servicing company in Greece, in July 2020, the Carve-out of Alpha Bank’s NPE Management Unit onto CEPAL will have been completed by the end of this month, ensuring a seamless transition. Employees’acceptance of theirvoluntary transfer to CEPAL currently exceeds 90%.
HAPS-compliant credit pre-ratings have been received and applications for the provision of guaranteesby the Greek State, on Senior notes of an amount up to Euro 3.7 billion, have been submitted for Euro 10.8 billion gross book value, securing key financials of the Transaction. Post Galaxy, Alpha Bank’s NPL ratio in Greece will be reduced to 13%1over total loans, while its NPE ratio will bereduced to 24%1.
Alpha Bank’s CEO, Vassilios Psaltis stated:
“The pandemic continues to induce a significant level of
volatility to the economy. Following the decision of our government to
enter into a second nation-wide lockdown, relevant news-flow on the
effectiveness of vaccines has provided significant underpinning to
confidence. In these unprecedented circumstances, we held a steady
course in our Project Galaxy, a Euro 10.8 billion NPE securitization,
accompanied by the sale of our wholly owned servicer, Cepal Hellas.
Despite a most challenging environment, we received two binding offers
from international high-quality investors and we selected a preferred
bidder, with a view to sign our transaction within the year.
Shedding off these legacy assets will transform our balance
sheet, as it will reduce our NPLs in Greece by 62%, to Euro 4.8 billion,
within our envisaged capital envelope.
Our operational transformation and digitalisation are progressing
well. The strong support to our Customers, through to October 2020,
gets manifested by the outstanding repayment moratoria in Greece of Euro
4.2 billion and by the new loans of Euro 4.6 billion we provided them.
Our sound liquidity and capital position, at 18.3%, empower us to play a
leading role in supporting our Customers in achieving an early return
to normal economic activity.In the nine months, we managed to increase
our core pre-provision income by 4% year-on-year, with a continuous
focus on our cost base.
This resilient performance allowed us to comfortably absorb loan
impairments of Euro 737 million, of which circa 40% are Covid-related,
thus delivering a profit of Euro 130 million, up by 42% year-on-year.
In these extremely challenging conditions, I want to thank our Employees for their commitment and all the hard work they are putting in to service our Customers so that we manage the current difficulties together and we position our Bank to come out as a clear winner from this crisis."
